Almost 20,000 high street jobs may be put at risk next year by a scheduled
£240m rise in business rates, Britain’s retailers have warned.

The industry is facing the damaging tax increase because September’s retail prices index (RPI) of inflation, used to calculate the annual rise in business rates, came in at 3.2pc.

The British Retail Consortium (BRC) warned that the extra cost will put as many 19,670 full time jobs at risk as companies struggle to find the money in a market still suffering from anaemic consumer spending.

Helen Dickinson, director general at the BRC, said: “Across the country today, retailers are adding up what this increase in the RPI will mean for the cost of their business rates next year. Many will be wondering whether they will be able to stay open.”

Annual rises in business rates are calculated using the September RPI and the size of the company’s property. After yesterday’s numbers, the inflation multiplier will rise from 0.471 to 0.485 in April next year.

In total, the increase will cost companies an extra £850m, with retailers paying £242m of that.

The plight of small shopkeepers has become a key political battleground since Ed Miliband pledged last month to scrap a planned corporation tax cut in 2015 to fund a reduction in business rates.

The BRC and employers group the CBI have called on politicians to go further and completely overhaul the system. According to the BRC, high street retailers pay more than three times as much in business rates as they do in corporation tax, putting them at a disadvantage to online rivals, threatening jobs, and stifling entrepreneurs.

Ms Dickinson said the system “is no longer fit for purpose”. Katja Hall, CBI’s chief policy director, added: “We already have one of the highest commercial property taxes of any EU country, so the Government must step in at the Autumn Statement to limit next year’s business rates increase at 2pc.”

September’s official cost of living data also offered little respite for households. The consumer prices index (CPI) of inflation held steady at 2.7pc, defying forecasts of a drop to 2.6pc, the Office for National Statistics said. With wages rising at roughly 1pc, 2013 is on course to be another tough year for family finances.

A drop in petrol prices last month was offset by the rising cost of air travel but economists said they still expected inflation to fall back to the Bank of England’s 2pc target by the end of the year, despite a general rise in energy bills following Scottish and Southern Energy’s 8.2pc price hike.

Petrol prices fell 0.2pc over the month, or 0.5p a litre, to stand at £1.37 a litre. This compared with a 2.7pc rise for the same period in 2012.

Michael Saunders, UK economist at Citi, said: “We expect CPI will fall to about 2.4pc in October, helped by the sharp recent drop in petrol prices, falling to about 2pc in December even with the recently-announced rises in energy prices.

“We expect that CPI inflation on average will be close to the 2pc target in 2014. Domestic cost pressures remain weak, while import prices have flattened off recently.”

Food inflation stood at around 4.8pc, ahead of wage increases but little changed on last month. Fruit and vegetable price rises nudged up, driven by plums and organic apples, as well as cauliflowers, onions and premium potato crisps.

Alan Clarke at Scotiabank said food prices “should cool off in the months ahead”.